The Serious Compliance Risks of Manual Leave Management

On the surface it may seem like calling the compliance risks below “serious” is superfluous because, in theory, any compliance risk is inherently serious. But the compliance risks associated with leave of absence management are particularly serious to you and your organization because:

  1. Legal fees and court battles are…not cheap.
  2. Reputation damage can take years to undo.
  3. Employee attrition lowers morale and company output while increasing the time and budget spent to replace the lost talent.

High turnover, costly lawsuits, and reputational damage are all at stake when administering a single leave of absence for your employees. Given the complex and dynamic nature of leave and the amount of timely and sensitive data HR and People Ops teams are required to keep tabs on, compliance risks become more probable the more you have to rely on manual processes.

We’re only human (allegedly…). Clerical mistakes happen. Spreadsheets get messy. Managers go rogue. Understanding where the risks in your manual leave of absence process reside can help you identify where you may want to pay extra consideration to, or evaluate the necessity for an automated solution that removes the risks.

Tracking Leave of Absence Data

Manually tracking leave of absence data is more than a continual thorn in the side of your ability to be productive. It’s also a risky compliance component of every organization’s leave of absence process. Here are the risks:

Human Error: Manual tracking heavily relies on human input and calculations. You or your employees may make mistakes when recording leave requests, calculating balances, or updating spreadsheets, leading to incorrect data. Even simple typographical errors can have significant consequences!

Lack of Real-time Updates: Manual systems often suffer from delays in data entry and updates. When employees take leave or make changes to their schedules, it may not be immediately reflected in the system and as such can result in outdated information and miscalculations.

Complex Leave Policies: Many organizations (yours might be one of them) have complex leave policies, involving different types of leave and eligibility criteria. Manually tracking these policies can be prone to misunderstandings and misinterpretations, further increasing the risk of inaccuracies.

Inconsistent Record-keeping: Inconsistent record-keeping practices among different employees or departments can lead to disparities in data quality. Without standardized procedures, it becomes challenging to maintain data accuracy across the organization.

Limited Accountability: Manual systems often lack robust accountability mechanisms. Inaccuracies might go unnoticed, uncorrected, or unreported, which can perpetuate data issues over time.

Auditing and Compliance Challenges: Relying on manual processes to provide adequate documentation for auditing and compliance purposes is a waking nightmare. Regulators may require accurate and detailed records of leave balances and usage, and your manual systems may not be up to the task.

If you’re manually tracking your leave data today, and you’re pleading your case for a better solution, explaining the cluster-(bad word) of compliance risk that is having to track data across multiple systems and spreadsheets and to do so in real-time, is a great place to start.

When Employees Miss Important Leave of Absence Dates

Meeting deadlines for requesting and managing leaves of absence is crucial for maintaining legal compliance and ensuring a smooth process. Federal and state programs might have important deadlines your employees need to submit information or paperwork for, and missing them could mean employees missing out on coverage or job protection. 

Further, employers are responsible for complying with the requirements of state and federal leave programs. Failure to do so can result in legal violations, which may lead to fines, penalties, or other legal consequences.

If you’re manually managing your leaves of absence, you are putting a mountain of risk responsibility on your shoulders to keep track of your employees’ claims, due dates, and communications. You also are required to maintain accurate records of leave requests, approvals, and related documentation. Inaccurate or incomplete record-keeping can lead to compliance issues as well.

The Risk of Inconsistently Administered Leaves of Absence

Leaves of absence, whether for medical, family, or other reasons, must be administered consistently, or it can lead to a range of problems that threaten the compliance confidence of your organization.

Inconsistently administrating your leave policies can expose your organization to legal liabilities resulting from claims of discrimination and the violation of employees’ rights. Perhaps the most difficult part of managing leaves manually, HR and People Ops teams must ensure that they consistently apply leave laws and policies to avoid costly legal battles and penalties.

The collateral damage here is reputational damage. When employees perceive unfair treatment or inconsistency in leave approvals, it can lead to negative sentiment and damage your organization’s brand. We are in the information age, and potential employees are doing their research. They may be discouraged from joining your company if you’re getting bad press, and clients may lose trust in your org’s ability to deliver reliable and consistent services.

If you don’t have any plans to outsource to a dedicated leave management solution, prioritize the development and implementation of clear, equitable, and consistently applied leave policies to ensure legal adherence, protect your reputation, and maintain financial stability.

Stay Up to Date with Leave of Absence Laws

This one seems obvious, but keeps HR and People Ops leaders up at night just the same. Leave laws evolve over time, and more and more states are providing programs that organizations need to adhere to. Keeping up with them on your own is nerve-wracking at best, and a compliance minefield at worst.

These laws, which can vary at federal, state, and local levels, dictate employee rights and your obligations regarding time off for medical, family, or other protected reasons. You might not even realize that your outdated policies can lead to unintentional violations, resulting in more costly legal consequences and fines, and provide yet another avenue for having to mitigate reputational damage. 

Your employees may file complaints or lawsuits if they feel their rights are infringed upon and non-compliance can disrupt workforce management, impacting productivity and employee morale. 

Manually managing your leaves of absence requires you to continually monitor the leave law landscape and adapt your leave policies to align with evolving legal requirements. If you do look to outsource your leave management process, ensure they’ve got the leave law landscape on lockdown.

How Managers Impact Leave of Absence

Managers. They’re great at what they do but bless ‘em they (well most of them) don’t know a thing about their role in leave of absence. Managers can greatly impact leave of absence compliance within organizations as their actions (or inactions) can pose significant risks. Perhaps a manager misinterprets or misapplies leave policies, which can result in legal violations. 

Maybe they deny eligible employees their entitled leave, or pressure them not to take it can lead. That can lead to costly legal consequences, including discrimination or retaliation claims. Additionally, inconsistent or biased decision-making by managers may create a hostile work environment, harming employee morale and retention.

If you’re manually managing your leaves of absence, make sure your process involves adequate training and clear communication with managers. This way you can help ensure they’re acting in accordance with leave of absence laws, minimizing legal and reputational risks while fostering a supportive workplace culture.

Does Dedicated Leave Management Software Keep You Compliant?

The short and unsatisfying answer is…it depends. Not all leave management vendors keep your organization compliant across all aspects of a leave to the same degree. It’s important to ensure the solution is equipped with leave law expertise, can manage all leave types across the country, prioritizes data security, keeps both your employees and managers educated in the know at all times, automates tracking, and provides employee support from start to finish so deadlines aren’t missed, and makes form filing easy and standardized.

About Tilt

Tilt is leading the charge in all things leave of absence management through easy-to-use tech and human touch. Since 2017, our proprietary platform and Empathy Warriors have been helping customers make leave not suck by eliminating administrative burdens, keeping companies compliant, and providing a truly positive and supportive leave of absence experience for their people.

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